Gold Consolidates after Monday’s Crash

The bullion was consolidating on Tuesday and was trading slightly higher during the midday session, with the price hovering at around 1,190 USD.

We saw some heavy selling on Monday and the precious metal plummeted by 1.5 per cent, but later in the day it found some buyers and trimmed some losses.

The price briefly dipped below the bullish trend line, which is around 1,186 USD, but managed to crawl back above and therefore, returning gold within the bigger triangle patter. The first major selling zone is at around 1,192 USD, where previous lows are located. If the bullion jumps beyond this, we could see a rally towards the psychological level of 1,200 USD.

On the other hand, should bears hold a stronger position, support could be found at the mentioned trend line near 1,186 USD and if this is not held, gold may decline to previous lows of 1,181 USD. However, if we look at the bigger picture, the next target for bears could be at around 1,172 USD.

As long as the price remains below 1,195 USD, the outlook seems bearish and favours selling rallies.

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